Pension Calculator
Unlike a 401(k), a traditional pension doesn't depend on how the stock market performs — it's a promise based on a formula, driven by how long you worked and what you earned. Most people never actually run that formula themselves; this calculator does, so you can see roughly what to expect well before retirement.
Enter your details to see your estimated pension.
How to use this calculator
- Enter your total years of service with the employer.
- Enter your final average salary (often the average of your highest 3-5 years).
- Enter your plan's benefit multiplier — find this in your pension plan documents.
- Click "Estimate my pension" to see your projected annual and monthly benefit.
How the calculation works
Most defined-benefit pensions use the same basic formula: Annual Pension = Years of Service × Multiplier × Final Average Salary. The multiplier (also called the accrual rate) is a percentage set by your specific plan — commonly somewhere between 1.5% and 2.5% per year of service. Your final average salary is typically the average of your highest-earning consecutive years, not simply your last paycheck, which is why a late-career promotion can meaningfully raise the final number.
A worked example
Say you worked 25 years for an employer with a 2% multiplier, and your final average salary (highest 5 years) was $72,000. That's 25 × 2% × $72,000 = $36,000 a year, or $3,000 a month. Stay an extra 5 years under the same formula and the pension jumps to 30 × 2% × $72,000 = $43,200 a year — a reminder that in a defined-benefit plan, years of service compound the benefit just as directly as the salary itself does.
Frequently asked questions
Where do I find my plan's multiplier?
Check your Summary Plan Description (SPD) or ask your HR or benefits department — it varies significantly by employer and plan type.
What counts as "final average salary"?
Most plans average your highest-earning consecutive years (often 3 or 5) rather than your very last salary — check your specific plan's definition.
Does this include cost-of-living adjustments?
No, this is a base estimate. Some pensions include COLAs after retirement that would increase the benefit over time.
Is my pension taxed?
Generally yes — pension income is typically taxed as ordinary income in retirement, similar to a Traditional 401(k) or IRA withdrawal.
What is vesting for a pension?
Vesting is the point at which you've earned a non-forfeitable right to your pension benefit, often after a set number of years of service. Leaving before you're vested can mean forfeiting the employer-funded portion entirely.
Are pensions still common?
They've become less common in the private sector, where 401(k)-style defined-contribution plans have largely taken over — but pensions remain common in government, education, and some union jobs.